DIY data

Katie Martin (0:06)

Pushkin. The US federal government shutdown is dragging on and are now running into its second month. One of the effects of that is that we have very little economic data to work with. We're not flying entirely blind, but we are wearing aviator shades and it's already dark. In the blackout, investors are scrambling around looking for alternative data points to give them a picture of what the US economy is up to, from car sales to family restaurants. Today on the show, we're looking at DIY data, what it is, whether it's reliable, and how long this frankly ridiculous situation is likely to last. This is Unhedged, the markets and finance podcast from the Financial Times and Pushkin. I'm Katie Martin, a markets columnist at the FT in a weirdly mild London, and I'm joined down the line all the way from New York City by the head honcho of the Unhedged newsletter, my very good friend and very nice, Rob Armstrong.

Rob Armstrong (1:06)

I like that metaphor a lot that you used. It's dark and we have our sunglasses on.

Katie Martin (1:12)

Yeah, we have our sunglasses on.

Rob Armstrong (1:15)

And it's not because we're cool. It's because we're idiots.

Katie Martin (1:19)

We are also cool. Now Rob, we received some correspondence this week, did we not? Listeners, we love to hear from you, unhedged.ft.com.

But one listener wrote in to say that I'm too mean to you.

Rob Armstrong (1:36)

I'm glad that someone else is noticing the systematic pattern of workplace cruelty that we've been experiencing in this podcast. Do you want to read out a little bit from that email?

Katie Martin (1:49)

Oh, I don't have it on me, but the gist of it was...

Rob Armstrong (1:51)

The guy basically said, I feel bad for Rob because Katie is so mean to him on air.

Katie Martin (1:56)

Apparently, I use you as a punching bag. And also, I'm becoming very tiresome.

Rob Armstrong (2:02)

They're really listening, Katie. They really get the point of the show. Speaking of punching bags, the US economy.

Katie Martin (2:08)

We will get to the US economy in a sec, but I did say that you can handle it, and I reckon you can.

Rob Armstrong (2:12)

Yeah, I'm tough. Big boy.

Katie Martin (2:14)

But also, I'm going to try and be nice to you. So, speaking of punching bags, yes, US economy. I mean, if we don't get US economic data, does the US economy really exist?

I mean, what's going on?

Rob Armstrong (2:29)

Part of what is hard about this situation for me, as a person who writes about the American economy and its effect on American markets, is that there's always a flow of big chunky pieces of news. And then you kind of contextualize those big chunky pieces of news against this more systematic and careful or statistically well-grounded background of big government reports about what is going on with things like inflation or jobs or, for that matter, retail sales. And now, we have a lot of the big chunky headlines, but we have less and less of that sort of background context that the official reports provide. So, we're sort of trapped in anecdote land in some way.

Katie Martin (3:24)

Yes. If this situation continues, you're not going to know what to write about every day in your newsletter. Won't anyone think of what's wrong with you?

Rob Armstrong (3:32)

Yeah, well, who will think of the journalists? Yeah, exactly.

Katie Martin (3:36)

So, the situation, as I understand it, is as follows, right? We got the September inflation data for the US. We got that in October. That's the way this always works. It's like it takes a few weeks to kind of put all the numbers together. But, effectively, it's going to be as if October never happened, because the people who go out with clipboards to write down prices of things are not going to be doing it, or haven't done it in October. So, they're going to have nothing to report back in November.

Rob Armstrong (4:04)

Yeah, that's information we will never get. I think that's correct. If someone at the government is collecting those prices and is waiting to spring them on us, call Unhedged first, I say to that person.

Katie Martin (4:17)

Yes, if you have a clipboard, we want to know about it. So I asked someone who knows about these things, Chris Giles, our sort of econ pointy head, and he said payrolls data, so non-farm payrolls data, the big US employment report, it might be possible for the government to say, okay, give us your past two months of data, so they can kind of catch up. But the whole clipboards and shops thing basically can't happen again. And also he was saying that the data that we got for September in October might be a little bit wobbly because it might have some gaps in it. So there are numbers that might not be 100% reliable. There are some numbers that are going to go missing. So what is a diligent investor to do? This is the sort of information that you just need to make sensible decisions.